A general rule when using the RSI is that values between 20-60 are associated with bear market fluctuations. While it’s easy to get drawn into these bullish rallies and it sure is nice to think that we’ve begun a new bull market the chances are really slim in my opinion.I’ll be the first to admit I got caught with my pants down with this latest show of strength in the markets, I’m not ready to join the bull camp until we see some higher highs and a break outside of the current range. That would be the range bound of the chart itself and the RSI.

We very well may rally up to the top range of this channel, but I wouldn’t expect much more. Until then I’ll probably be playing the long side on a few scalps, but having missed out on all of this rally I don’t have the cushion I would normally have to take on much upside risk.